APNewsBreak: Group says Poker Winnings are frozen

WASHINGTON (AP) — An advocacy group for online poker said Tuesday that the federal government has frozen more than $30 million in the accounts of payment processors that handle the winnings of thousands of online poker players.

The Justice Department has long maintained that Internet gambling is illegal, a view that the poker group challenges.

The Poker Players Alliance told The Associated Press that the U.S. attorney for the Southern District of New York instructed three banks to freeze the accounts.

Documents obtained by the AP show that a judge in the district issued a seizure warrant last week for an account at a Wells Fargo bank in San Francisco, and that a federal prosecutor told a bank in Arizona to freeze an account.

In a letter dated Friday and faxed to Alliance Bank of Arizona, the prosecutor said that accounts held by payment processor Allied Systems Inc. are subject to seizure and forfeiture "because they constitute property involved in money laundering transactions and illegal gambling offenses." The letter was signed by Arlo Devlin-Brown, the assistant U.S. attorney for the Southern District of New York.

In another letter faxed the same day, Devlin-Brown asks that the bank treat the funds "as legally seized" by the FBI, saying that the government has probable cause that the gambling payments of U.S. residents had been directed to offshore illegal Internet gambling businesses.

A spokeswoman at the Southern District declined to comment.

John Pappas, executive director of the Poker Players Alliance, called the government's move an "unprecedented action" against online poker players.

In a letter Monday night to Devlin-Brown, Pappas said that the funds belong to the alliance's members, and requested that his group be notified and given the opportunity to be heard regarding attempts to seize the frozen funds.

"The PPA will pursue every legal course available to ensure that poker players' funds are not seized and their right to play poker online is protected," he wrote.